Heavy Duty Trucking, January 2018

HDT JANUARY 2018 8 WWW TRUCKINGINFO COM y personal experience with e commerce this year was frustrating and it started even before Black Friday In mid November an order from a clothing store never arrived at our house apparently it was delivered to the wrong address somehow refused and sent back to the shipper In December I got a postcard from UPS notifying me that they were holding an item someone had sent to my P O box Luckily I called rather than traipsing over to the UPS facility they had returned it to the sender only two days after the date on the postcard because they didnt have enough room Numerous gifts we ordered through Amazon Prime were late One apparently was lost in limbo between UPS and the Post Office so we re ordered it only to get a notice that it too was delayed So I wasnt surprised to read a week before Christmas that UPS was experiencing shipping delays due to the surge in online shopping UPS drivers arent happy about the workload with the Teamsters complaining that this is the third year in a row UPS has underestimated demand Ive seen postal drivers operating unsafely obviously in a hurry to get those deliveries done In short the peak e commerce season is stretching the limits of the nations freight and package handling capabilities as the transportation analysts at Stifel put it FedEx on the other hand reportedly is handling the surge better In reporting an 11 gain in net profit for the quarter ending Nov 30 Chairman and CEO Fred Smith said the company handled this years peak season because of its close work with shippers to project demand Nevertheless as Bloomberg notes deliveries to homes are more costly and complicated than taking goods to business sites UPS and FedEx are looking for solutions from charging more for customers to schedule packages to offering pickup via lockers at drugstores grocery stores and other locations E tail giant Amazon is looking for solutions as well and some believe it is setting itself up as a competitor to UPS and FedEx Stifel analysts spent a couple weeks on the road in early December talking to motor carriers Amazon they said wasnt making many friends with those carriers mostly due to an unwillingness or inability to meet the consistent volume commitments and lane assignments coveted by asset heavy truckload carriers Between that problem and the volume overload and delays seen by UPS and other parcel carriers Amazon may be inclined to rethink its transportation network going forward the analysts said in a report to investors One alternative would be to bring more transportation operations in house and some analysts do expect the e commerce giant to eventually become a full fledged parcel carrier Of course the challenges of building out the type of infrastructure that UPS and FedEx have been building for decades is no small feat Another approach Stifel said would be to implement more of a core carrier program fully engaging with the nations largest carriers in order to ensure capacity for its base load volume So far Amazon seems to be focusing on smaller companies recruiting owner operators and small fleets to pull its branded trailers as well as local delivery providers with vans and delivery trucks The Stifel analysts were less than enthusiastic about that approach We are not sure that the power only deals Amazon has been executing with small carriers is a sustainable program over the long term given Amazons growth trajectory My experience tells me theres no simple answer to the challenges posed by skyrocketing e commerce It also makes me wonder if more people will turn back to brick and mortar shopping when they dont get their Christmas presents on time If not there are those Amazon patent filings for things like a drone warehouse hub in the sky Traveling the e commerce road has its ups and downs Deborah Lockridge Editor in Chief dlockridge@ truckinginfo com With 28 years covering the trucking industry Deborah Lockridge is known for her award winning in depth features on diverse issues She can be reached at 205 989 6467 or dlockridge@ truckinginfo com EDITORIAL Peak e commerce season is stretching the limits of the nations freight and package handling capabilities M

View the Covers and the Table of Contents pages from every issue of this publication, all gathered together for easy browsing. Just flip pages and zoom as you normally do to see each issue's Cover and Table of Contents, then follow links directly to interesting content.